Treasuries Extend Pullback Amid Lingering Interest Rate Uncertainty

Treasuries moved to the downside during trading on Monday, extending the pullback seen over the two previous sessions.

Bond prices regained some ground after coming under pressure in early trading but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.1 basis points to 3.525 percent.

The ten-year yield closed higher for the third straight session after ending last Wednesday’s trading at a four-month closing low.

The extended pullback by treasuries came amid lingering concerns about the outlook for interest rates ahead of next week’s Federal Reserve meeting.

The Fed is widely expected to further slow the pace of rate hikes to 25 basis points, but the possibility of additional rate hikes continues to hang over the bond markets.

Continued strength on Wall Street may also have reduced the appeal of bonds, with the Nasdaq and S&P 500 reaching their best intraday levels in over a month.

In U.S. economic news, the Conference Board released a report showing another sharp drop by its reading on leading U.S. economic indicators in the month of December.

The Conference Board said its leading economic index dove by 1.0 percent in December after tumbling by a revised 1.1 percent in November.

Economists had expected the index to decrease by 0.7 percent compared to the 1.0 percent slump originally reported for the previous month.

Trading on Tuesday may be somewhat subdued amid a lack of major U.S. economic data, with traders looking ahead to reports on durable goods orders, fourth quarter GDP, new home sales and personal income and spending later in the week.

Source: Read Full Article